Posts Tagged ‘Lillian Glasser’

JULY 25, 2011 VOLUME 18 NUMBER 27
We have told you about Lillian Glasser before. She is a wealthy New Jersey woman with two children who disagree about where she resides, who should manage her health care and finances, and what should be done about financial actions taken in the months before court proceedings were begun. Much of the dispute centers over whether Texas or New Jersey courts should hear her case. That issue seems to have been put to rest, with New Jersey the victor.

To recap: Ms. Glasser, then worth about $25 million, lived in New Jersey. She occasionally visited her son in Florida (where she also had a rented home) and her daughter in Texas. In 2002, Ms. Glasser was persuaded to execute a new estate plan. She signed a will putting her daughter in charge of her estate, and a new power of attorney in favor of her daughter.

In 2004 and 2005, Ms. Glasser’s daughter fired her mother’s caretaker in Florida, moved Ms. Glasser to Texas, and initiated a Texas guardianship proceeding. In the meantime, she used her power of attorney to create a family limited partnership which she controlled, and transferred the bulk of her mother’s assets into the partnership’s name.

The Texas guardianship proceeding spawned a variety of legal actions. Ms. Glasser’s son, a nephew who was close to her and a family friend all objected in Texas. The litigation costs in Texas exceeded a million dollars, with much of the cost being paid from Ms. Glasser’s assets. The result: the Texas courts authorized her return to New Jersey, where there was more legal action pending.

After Ms. Glasser’s nephew filed a separate New Jersey guardianship proceeding, that state’s Adult Protective Services agency weighed in with a complaint alleging that Ms. Glasser had been subjected to exploitation. Those two actions were consolidated. Meanwhile, the Texas courts decided to wait until New Jersey had completed its review of Ms. Glasser’s situation.

In 2007 the New Jersey court held a 34-day trial on Ms. Glasser’s condition, the transfers of her assets, and the actions of the various players. The result: a judgment finding that Ms. Glasser’s daughter exercised undue influence and behaved in her own interest rather than her mother’s best interest, ordering return of all of the assets transferred into the family limited partnership, and appointing a bank as guardian of Ms. Glasser’s estate and an independent party as guardian of her person. That ruling was the subject of our 2007 update on the Glasser litigation. Ms. Glasser’s daughter appealed that ruling, as did two of the other litigants; much of the appellate argument focused on who should pay the extensive legal costs of the proceedings. The New Jersey Superior Court Appellate Division (that state’s intermediate appellate court) has now — four years after the original court findings — ruled on those appeals.

Spoiler alert: the appellate court affirmed the extensive trial court decision without modifying a single finding or order.

The appellate judges approved the trial judge’s finding that Ms. Glasser’s daughter had exercised undue influence over her mother. They agreed that she should be ordered to put all of her mother’s assets back into Ms. Glasser’s name, to be managed by the bank named as guardian of her estate (what we in Arizona would call her conservator). They confirmed the daughter’s history of inappropriate and evasive actions with regard to Ms. Glasser’s placement and care, and agreed that she was not suitable to manage her mother’s personal OR financial matters.

Then the appellate judges turned to the extensive fees incurred in the various legal proceedings in two states. They confirmed the trial judge’s decisions that:

Ms. Glasser’s daughter should pay her own legal fees in both New Jersey and Texas. That meant that she would have to repay the money she had taken from her mother’s assets to fund the Texas proceedings, for which she had paid her attorneys at least $1 million.

Ms. Glasser’s estate should pay the legal fees of the lawyer she selected to represent her (the court having found that she had the capacity necessary to hire an attorney of her own choosing). It should also pay the legal fees of her nephew, who filed the guardianship action in New Jersey, without forcing her daughter to reimburse those fees.

Ms. Glasser’s son argued that his mother’s estate should pay most or all of his legal fees; the trial judge decided that it would not order her to pay all of his legal fees in Texas, and that (since he hadn’t filed a guardianship petition in New Jersey) he was not entitled to reimbursement for his New Jersey expenditures. The appellate judges agreed, noting that his sister had no standing to object to the amounts allowed in any case.

In the Matter of Lillian Glasser, July 21, 2011.

So how much did Ms. Glasser’s legal predicament cost her, and what was the total cost paid by all of the litigants in protracted proceedings in two states? It may be impossible to calculate exactly, but it is obviously several millions of dollars — after all, her daughter’s legal fees in Texas alone exceeded one million dollars.

Assuming (and the evidence is good) that the outcome is correct, was there a way to prevent the absurd expenditure of millions of dollars, the delay of half a decade, and the angst and anguish associated with this case? A few things might have helped:

A carefully created and well-documented estate plan, drafted at a time when Ms. Glasser was clearly competent, might have headed off some of these problems. It might not, however. Ms. Glasser did have an estate plan in place in 2002, at a time when she was competent to make her plans. Her daughter’s undue influence and over-reaching upset that plan over the next few years.

If both Texas and New Jersey had adopted the Uniform Adult Guardianship and Protective Proceedings Jurisdiction Act prior to 2005 then considerable cost might have been avoided. That Act would have made clear that New Jersey had jurisdiction and Texas should not act — the very conclusion that the respective judges reached, though only after more than a million dollars in legal fees. Unfortunately, the Jurisdiction Act did not exist in 2005. Since it was first proposed in 2007, about two-thirds of the states have adopted it (including Arizona). So far neither Texas nor New Jersey has. In fairness, adoption of the Jurisdiction Act might have sped the proceedings up by only a few months, and saved only a fraction of the many millions of legal costs.

Mediation of the family disputes might have been effective — but it might not have. The appellate judges made reference to Ms. Glasser’s son adopting a “‘take no prisoners’ approach to anyone who disagreed with his views.” Her daughter’s intransigence is pretty clear from her actions and her legal posture. Perhaps they could not have ironed out their differences.

Mark Glasser and Suzanne Glasser Matthews, brother and sister, have spent the last two years battling for physical and financial control over their mother, Lillian Glasser. The 86-year-old Mrs. Glasser, who at one point had an estimated net worth of $25 million, has been the subject of proceedings first in Texas and more recently in New Jersey, where a trial judge heard thirty-four days of testimony and argument last fall.

Nearly six months after the extended proceedings, New Jersey Judge Alexander Waugh has issued his ruling, appointing a guardian of the person and estate for Mrs. Glasser. Rather than appointing any of the family members who might have been candidates, Judge Waugh appointed New Jersey attorney Joseph Catanese as guardian of the person. Mr. Catanese had served as court-appointed counsel for Mrs. Glasser during the trial, and the judge indicated that her condition could worsen if yet another new party was injected into her life.

Judge Waugh also appointed a guardian of the estate (the equivalent of a conservator in Arizona and some other states), turning to the financial management firm Mrs. Glasser and her late husband had used before his death. Mrs. Matthews, her daughter, was ordered to return control of approximately $20 million she had transferred to a family limited partnership just before initiating guardianship proceedings in Texas (see the San Antonio Express-News report), and the judge made clear that at least some portion of the costs incurred by Mrs. Matthews to set up that entity would have to be reimbursed as well.

All of that is very interesting, and Judge Waugh’s written opinion reads like a fictional saga (for more detail and an excellent running commentary on the case, consider Texas Tech College of Law Prof. Gerry W. Beyer’s blog coverage of the case). What the Lillian Glasser case points out even more clearly, however, is a growing problem in guardianship matters—the conflicts that can arise between jurisdictions with the increased mobility of families, support systems, caregivers and assets.

Guardianship proceedings were initiated in Texas when Mrs. Matthews sought appointment as guardian of both her mother’s person and her estate. After Mrs. Matthews’ appointment as temporary guardian, another relative initiated the New Jersey case, arguing that Mrs. Glasser was a New Jersey resident and the question of her capacity—and management of her affairs—should be handled there.

In an earlier ruling Judge Waugh determined that his court should have primary jurisdiction over the guardianship. Luckily, the Texas judge assented, staying the proceedings until a hearing could be completed in New Jersey. Although neither state’s laws include explicit provisions permitting such an action, the two judges’ cooperation saved considerable expense and duplicative legal proceedings.

Arizona law also lacks a provision for resolution of interstate guardianship conflicts. In practice, such conflicts are handled on an ad hoc basis, considering the strength of the proposed ward’s ties to each of the jurisdictions, the location of principal witnesses, and other factors. Frequently the result is that the state where proceedings are first filed has priority, even though the stronger contacts are elsewhere.

The National Conference of Commissioners on Uniform State Laws (NCCUSL), which proposes uniform statutes for consideration by the states, has addressed this growing problem. A provision of the Uniform Guardianship and Protective Proceedings Act, proposed in 1997, would specifically permit the judge in one state to notify and consult with the judge in another state, and to decide whether to accept or decline jurisdiction based on the best interests of the proposed ward (see section 107(b) of the UGPPA).

Another growing problem involves movement of wards after appointment of a guardian or conservator. Under current law and practice, it may be necessary to initiate a whole new guardianship proceeding in the new state after a move, at considerable expense and duplicating much legal effort The proposed uniform law would also address that problem, permitting the final guardianship order of one state to simply be lodged with, and become an order of, the ward’s new state.